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lax policy going forward. >> i need a lightning fast one here, sorry, but the fomc minutes for december were released today. i think it's the december meeting. they're talking about buying more bonds and, therefore, creating more money and then keeping the interest rates rock bottom. now, i want to get your take on that, because gold prices have been rising and oil prices have been rising big time, and the dollar rally stopped ever since bernanke's speech on sunday. the minutes today contributed to a big gold rally. john, is the fed going to repeat the mistakes of the past? how do you see fed policy coming up here in 2010? >> i think they should start reducing their balance sheet, stop buying those securities. that's going in the wrong direction. i hope they adjust rates when they have to, keep them moving up when they have to, but it remains to be seen, and i think some of the doubts that you're seeing out there are reflecting some concerns of people. i'm going to keep arguing that
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things like the taylor rule and other guides should be followed so we don't get behind the curve like we did last time. >> what would the curve look like, last one. where would you place the federal funds rate according to the taylor rule right now? >> right now it's actually pretty close to where it is, but any kind of stronger recovery or any pickup of inflation should be raising it, but i would add start reducing the balance sheet right now so that you can raise rates when you have to. maybe in the next couple quarters. >> so begin the exit strategy by withdrawing reserves, maybe selling some bonds, soaking up reserves? and consumer price index, john, stopped falling. it's starting to creep higher. i just wonder, you could have a stronger economy. that's my take, and a little higher inflation. >> absolutely. remember, of course, this occurs with some lag, so the things they're doing now could bring inflation later and then it's going to be hard to get rid of. >> i don't know what bernanke was aiming at except sort of
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cover my keester, absolving him and the fed. i just don't get that, john. you've been saying this for so many years. you don't get emotional about it, you just keep putting it out there. >> at least there's a debate. we can respond. i think the self-criticism is important to have over there. >> all right, john taylor, thanks so much for joining us. coming up in "the kudlow report," senator dodd not running for reelection. current attorney general richard blumenthal has thrown his hat into the ring. he will be here shortly to tell us why he thinks he's the right man for the job and how he reacts to criticism from republicans earlier on in the show who took some shots at him. we will give dick blumenthal equal time. you are watching cnbc first and politics worldwide.
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we need to respond to the three republicans in line to challenge him. he's been called a big government spender and big government taxer.
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he favored t.a.r.p. and he favored the stimulus package and he's a career political insider and hopefully blumenthal will get here. does he have any links to the tea party movement and the free market populism that seems to be sweeping the country? "the kudlow report" will be right back as we wait for the front runner in this senate race in connecticut, richard blumenthal, the state attorney general. she wants to make up. we decide to turn in early. we just know. announcer: finding the moment that's right for you both can take some time. that's why cialis gives men with erectile dysfunction options: 36-hour cialis or cialis for daily use. cialis for daily use is a clinically proven low-dose tablet you take every day, so you can be ready anytime the moment is right. tell your doctor about your medical condition and
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as well as the most impressive lineup of phones. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access we now welcome the democratic candidate and the front runner for chris dodd's senate seat, dick blumenthal. dick blumenthal, you're great to fit us into your busy schedule. >> it's been a busy day, but i'm pleased to honored to be with you here today. >> here's what we heard from your punitive republican opponents. you're a big government spender and you're a big government taxer and you're a career political insider. let me stop there and get your reaction. >> are you going to stop there? isn't there more? >> let's take that one first. we're running a little short of time, but i know you can answer. >> first of all, what distinguishes my record, and i do have a record of 20 years as
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a law enforcer, is fighting tenaciously and tirelessly for the people of connecticut and that's the kind of public official -- i am a public official that folks want, whether it's republican or democrat as the next united states senator, someone who has independent stances not based on party. my record is one of avoiding unnecessary taxes as well as imprudent spending. i am fiscally responsible. my record in the state legislature, which was some time ago but still relevant, was one of fiscal prudence. and i believe the top priority for the next connecticut senator is more jobs for the nation and economic revival, and that will be my priority, and it has been also in enforcing anti-trust laws, consumer laws, and i have done so vigorously and
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aggressively because i believe that small businesses are protected as well as consumers. >> what you hear, and these are among your opponents, to be sure. they say dick blumenthal as attorney general all these years was too good, that you brought too many lawsuits against businesses, that you committed too many regulations, that you supported too much tax increases in the connecticut legislature, and, in fact, an odd statistics not so odd. in connecticut, since 1991 -- that's a long time ago -- there has not been a single net new private job created. the state is starving for capital. some people blame you. they say you're too much the regulator. how do you react to that? >> let me take those points one by one. first of all, we won those lawsuits. and the reason is not because of any tremendous advocacy or activism on my part, but because individuals, corporations, entities broke the law. the reason we won them is we
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were on the right side of the law and we took the right positions because i believe they were right for the sake of collecting money. and by the way, we rned $15, we have year after year after year, to the state of connecticut for every dollar spent on my office. >> that was bob in new york city, also, but the state has declined for all these years. why do you reckon that is? >> let me just address a relevant point which is relevant to your question. we have failed to complete jobs and i have never created regulations. i don't have that power, larry, nor have i created laws. but we do need incentives for businesses, particularly small business, which are the engines of job creation. and that is the reason that we
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need new leadership in washington. >> just in the last few moments, would you be willing to fight for a lower capital gains tax rate instead of having it go up as congress now to have it come down? would a lower capital gains tax help the state of connecticut and the nation? i'm running out of time but i wanted you to have a whack at that. >> i would certainly consider it. i worked for lower taxes when i was in the state legislature and i want to listen. as a matter of fact, listen to the citizens of connecticut. i've begun that conversation, my mind is open, and i want to come back on your show to answer that question more fully. thank you. >> dick blumenthal, we appreciate you coming on. i know it's been a very busy day. we hope to see more coming up. a. come on! that's pretty far. doc, look who's in town. ellen! copenhagen? cool, right? vacation. but still seeing patients. oh. [ whispering ] workaholic. i heard that. she said it. i...
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The Kudlow Report
CNBC January 6, 2010 7:43pm-8:00pm EST

News/Business. Larry Kudlow.

program was likely cut short due to a recording issue

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